The ability of Ontario municipalities to implement landlord licensing came into force in 2007 with changes to the province’s Municipal Act.

Compulsory licensing for small landlords is rapidly spreading throughout Ontario, having come into effect most recently in Waterloo on April 1 and North Bay on May 1. Other Ontario cities which have already implemented a licensing regime are Guelph, London, Mississauga and Oshawa.

The idea appears to be contagious, and many other cities are looking at the concept, including Hamilton and Kitchener.

Waterloo’s licensing regime is typical. Licensed rental properties in homes or townhouses can have no more than four bedrooms, but units in apartment buildings and condominiums are strangely exempt.

Landlords are required to pay application and annual fees of as much as $825 to rent bedrooms in houses and townhomes.

Regulated units are theoretically subject to higher standards for health and safety, and landlords are subject to a criminal records check. The new bylaws set maximum occupancy limits (apparently regulating how many people can sleep in one bedroom), and minimum distances separating one licensed building from a neighbouring one.

Previously required fire inspections have been eliminated, and landlords now have to self-certify compliance with six different bylaws, including, strangely, fence bylaws, as well as building, fire, electrical and health codes.

The ability of Ontario municipalities to implement landlord licensing came into force in 2007 with changes to the province’s Municipal Act, which allowed municipalities to regulate businesses and business transactions.

Many observers — including this one — are concerned that the new regulatory scheme is either a municipal money grab, or a crude attempt to regulate and limit housing for students and large families. Both groups are often classified as low income. In Waterloo, for example, two tenant families with three children each cannot live in houses within 150 metres of each other.

A North Bay city statement about its new bylaw says that the purpose of regulation includes ensuring that rental properties “do not create a nuisance to the surrounding neighbourhoods, and . . . protect the residential density, amenity, character and stability of the residential areas.”

Similar arguments were used to justify restrictive property covenants based on race and religion prior to the 1950s. In a horrendous 1949 decision of the Ontario Court of Appeal, the judges wrote that a restriction on title to land preventing purchase by those of “Jewish, Negro or coloured” race or blood was just to assure that the residents were “of a class who will get along together.”

It seems that in Waterloo, North Bay and elsewhere, today’s students and large families are being treated like yesterday’s minorities.

The commission has raised concerns that the bylaw requirements appear to target certain code-protected groups (such as families and students), or result in differential treatment of those groups.

“Housing is a fundamental right,” says OHRC chief commissioner Barbara Hall. “While rental housing licensing can be a valuable tool for promoting the safety and security of tenants, the ability to license must not be a licence to discriminate. We want to make sure this isn’t happening.”

Vince Brescia, president of the Federation of Rental Housing Providers (FRPO), agrees. “Municipalities are using licensing as a tool to block the provision of rental housing and drive up the costs, under the pretence of health and safety,” he told me. “This is an affront to affordable housing goals.”

Landlord groups have complained that the municipalities are in effect raising taxes on tenants, since licensing fees are funded by tenant rents. (Full disclosure: I am a residential landlord.)

Among the predicted outcomes of licensing are that accommodations will be less safe, many good landlords — especially mom and pop operations — will be squeezed out, rents will increase, and students and low-income families alike will have fewer housing options.

Will landlord licensing ever come to Toronto? It’s not impossible, but in this area, the municipal government itself has consistently been shown to be one of Toronto’s worst landlords.

Bob Aaron is a Toronto real estate lawyer and consumer advocate. He can be reached at bob@aaron.ca. Visit his website at aaron.ca.

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